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The ACT's nation leading feed-in tariff will pay solar generators a premium rate of 45.7c/kilowatt hour from July 1, 2010, following detailed advice from the ACT Independent Competition and Regulatory Commission, Minister for Energy, Simon Corbell, announced today.
"Today I am announcing my decision to revise the premium price for the Electricity Feed-in Tariff Scheme to 45.7c/kWh and that this price will remain in place for two years," Mr Corbell said.
"I have also decided to allow generators with a capacity of more than 10kW, and up to 30kW, to receive the full Premium price. Previously these generators were only eligible for 80% of the Premium."
The announcement follows the Government's acceptance of recommendations put forward by the Independent Competition and Regulatory Commission (ICRC) in its report on the Determination of Premium Rate, which was released on 15 March 2010.
"I have decided to fix the premium price for the period of two years for new installations to maintain investor confidence.
"This provides the community with certainty in their investment in renewable energy technologies. Further, allowing larger installations to receive the full Premium price will act as a great incentive to businesses which want to be part of the nation leading scheme."
Mr Corbell said the revised premium price in part reflected a reduction in the cost of installing solar PV systems. In addition, investors now have greater certainty as the Commonwealth has set the price of Renewable Energy Certificates (RECS) at $40 for small systems. This is a generous rate that also allows investors to calculate their pay back period.
The revised Premium price will apply to Feed-in Tariff Scheme contracts entered into from 1 July 2010 but not those entered into before this date, which will still attract the existing premium of 50.05c/kWh. All contracts are valid for 20 years from the date of contract.
"The feed-in tariff scheme has been a big success in the ACT with an increase in the number of solar installations on ACT roofs of almost 200% in the first 12 months," Mr Corbell said.
"This will further stimulate the growth of the ACT's clean economy and help reduce our greenhouse gas emissions and realise our goal of zero net emissions by 2060."
Mr Corbell said that under the revised Premium price, a household installing a 1.5kW system could expect to outlay a net amount of $3,463 after receiving a rebate of $6,038 for their 155 RECs. An installation of this size would pay back the system cost in six years, and make a rate of return of 16.9%. This compares with the current pay back period of five years and rate of return of 19.7%. The pay back period is still short and the return on investment very good for a household.
Owners installing larger generators may also benefit from the changes. With access to 100% of the revised Premium price, the ICRC estimate a generator of 15kW capacity to cost $85,119 after a rebate of $17,000 for its 435 RECs. The pay back period for a 15kW generator is now about 11 years, and the rate of return about 6.3%. This compares favourable with the estimated payback period of 14 years and rate of return of 4.1% under the Scheme as it currently exists.
The Government is currently considering an expansion of the Electricity Feed-in Tariff Scheme to installations beyond the current capacity limit of 30kW.
For more information on the Scheme, visit www.environment.act.gov.au/energy or contact the Department of the Environment, Climate Change, Energy and Water through Canberra Connect on 13 22 81.
